Acquisition
Short definition
An acquisition is control changing hands for cash, shares or a mix. Price walks from enterprise value down to equity value via net-debt and NWC adjustments.
Detailed explanation
A control premium, synergy and a competitive process inflate the multiple. Financing (cash, debt, shares) sets DSCR and dilution on close.
DD tests the price’s assumptions. The SPA allocates cash misses via warranties, indemnities and locked-box versus completion accounts.
Why it matters for the CFO
The wrong net-debt definition makes you overpay even if EV is right. If integration cash is not taken off NPV, the close “win” eats profit.
How to read it
EV/EBITDA can look cheap without maintenance and NWC. A control premium is the reverse of a minority discount.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.